Betting or gambling (including lottery tickets and most transactions in a casino)

Writing credit card cheques*

These are blank cheques issued by some credit card providers that you can pay with.

Ask your provider what transactions they count as a cash advance because you will be charged the same fees you would for withdrawing cash.

How much does a cash advance cost?

Cash advance fee

Most credit cards charge a fee when you withdraw cash, which is calculated as a percentage of the amount you take out. They typically charge about 3%, so if you withdrew £100 you would be charged £3.

They also specify a minimum fee amount, often around £3 which would mean you would still be charged £3 even if you only withdrew £10.

A few cards come without a withdrawal fee, but others charge up to 5% with a minimum fee of £5.

Daily interest

The interest charged on cash advances is different to when you make a purchase on your card:

You will be charged interest on the amount you withdraw from the day you take it out until you pay off the balance.

With most purchases you will not be charged interest unless you do not pay your bill in full when it arrives, sometimes up to 56 days later.

The daily interest rate for cash advances is usually higher than the card's standard APR. A typical card has an APR of 17.99% for most purchases but will charge 27.9% on cash advances. The rate can be as high as 69.9%.

For example, the Capital One Classic Card charges a 34.94% p.a. variable rate for cash advances, along with a 3% withdrawal fee. Here is an example of how much you would pay on a £150 cash withdrawal with the Capital One Classic Card if you paid your bill 36 days after withdrawing your cash:

Fee

Amount

Amount withdrawn

£150

Interest charged (36 days)

£5.17

Cash advance fee

£4.50

Total charged

£9.67

Total you pay back

£159.67

*Assumes a 3% fee and 34.94% p.a. variable rate on cash advances

Representative example: The standard interest rate on purchases is 34.94% p.a. (variable), so if you borrow £1,200 the representative APR will be 34.94% APR (variable).

If you do not repay the amount you withdraw by the date it is due, you will also have to pay other fees and even more interest.

It can also affect your credit record

Cash advances show up on your credit record. Other lenders will see this when you apply for credit with them, including loans, mortgages and credit cards.

Seeing a cash advance on your record will not necessarily stop a lender from accepting your application.

However, some might think that you struggle to handle your finances if you have had to withdraw cash on your credit card.

If you are planning to apply for a mortgage or large loan, avoid cash advances on your card to make sure you do not run the risk of putting off lenders.

How much cash can you withdraw?

Cash advances on your credit card usually have some of the following limits:

A minimum withdrawal amount, which is usually £10.

A daily withdrawal limit, which is the maximum you can get at an ATM each day (usually between £100 and £500). Some cards offer a larger limit if you take out cash in a branch instead.

A weekly or monthly limit, which is the maximum amount you can withdraw per week or month could be capped (for example £500).

Your total advance limit is a percentage* of your total credit limit that you can use towards cash advances. For example, if you had a credit limit of £2,000 and a 50% advance limit, you would not be able to have more than £1,000 of cash advances outstanding on your balance at any point (and no more than £2,000 owed in total).

*Some cards let you use up to 100% of your credit limit towards cash advances.

You can usually withdraw as many times as you need, as long as you do not go over your daily limit or your advance limit. However, withdrawing multiple times can be expensive as you will pay a fee each time.

How to save money on cash advances

Repay as soon as you can

Paying off the balance quickly means you will be charged less interest.

Here is an example of how much it would cost if you paid off a £150 cash withdrawal after 10, 20, 30 and 56 days after a cash advance:

Only make one withdrawal

You can save money on fees if you withdraw all of the cash you need in one go because you will be charged a fee each time you take out cash. Several trips to the cash machine will usually be more expensive than one larger withdrawal.

For example, ten £10 withdrawals would cost £30 in fees on a card with a 3% fee and £3 minimum. One £100 withdrawal would come with a fee of £3.

Use a card with low withdrawal fees

Some cards come without fees for cash withdrawals, and some have much lower interest rates on cash advances.

Check what fees your card charges before you use a cash advance or use our comparison to choose a new one - it shows the fees and the APR on cash withdrawals for each card.

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